CIT Group completed the sale of its commercial aircraft leasing business to Avolon Holdings, an international aircraft leasing company and wholly-owned subsidiary of Bohai Capital Holding, for a purchase price of $10.4 billion.

CIT will use the cash proceeds from the transaction to fund approximately $3 billion in capital return to shareholders and redeem $5.8 billion in senior unsecured debt. The liability management and capital return actions are expected to be initiated as soon as practicable and before the end of April. Separately, the company continues to evaluate the issuance of approximately $325 million of Tier 1 qualifying preferred stock, which would allow for an incremental return of an equivalent amount of common equity.

“This marks the completion of a landmark transaction that will further simplify our business model, enhance our core funding profile and enable us to return significant capital to our shareholders,” said Ellen R. Alemany, chairwoman and CEO. “I want to thank the CIT team for successfully achieving this milestone in our strategic plan. As we look ahead, we will continue to strengthen our position as a leading national bank for lending and leasing to the middle market and small businesses, while driving long-term shareholder value.”

With the completion of this transaction, as well as the recent sale of CIT’s stake in the TC-CIT aviation joint ventures, CIT has now exited the commercial aircraft leasing business. CIT’s Commercial Finance business will continue to work with aircraft owners, manufacturers, suppliers and service providers in the industry to offer loans for commercial aircraft, aircraft engines and aircraft parts as part of its Aerospace, Defense & Government Finance business.

J.P. Morgan Securities served as exclusive financial advisor and Wachtell, Lipton, Rosen & Katz served as legal counsel to CIT.